In 2021 the International Energy Agency (IEA) issued its projection of the world’s ability to meet the goal of keeping the global rise in temperature to below 1.5 degrees Celsius. In October it issued a revised report based on changes that have occurred since the 2021 report, in particular the war in Ukraine and substantial new commitments by countries, including passage of the Inflation Reduction Act here in the U.S.
Why does it matter?
Like all projections, the IEA’s projections of the changes in energy use between now and 2050 will undoubtedly be wrong, but its observations are instructive for bracketing what the future might hold, especially with respect to the need for gas and LNG.
What’s our view?
The IEA’s projections note that there has been a substantial change in the worst-case scenario for climate change and that with the current commitments made by the world’s governments, it may be possible to limit the rise in temperature to less than 2 degrees Celsius. This may make it harder for environmental purists to argue for their preferred solutions of only wind and solar, but after factoring in these new commitments, the use of natural gas is still projected to decline between now and 2050.